Job “openings” (click chart below for larger version), the reports most leading “demand side” indicator, has now declined on a year-over-year basis for 29 of the last 30 months.

Sliding down that slope of the Beveridge curve, the decline in the job vacancy rate clearly corresponded with an equal but inverse movement up in the general unemployment rate as can be plainly seen in the following chart (click chart for larger version).

With the latest revisions by the BLS, job “separations”, whereby workers and their employers go their separate ways by one means or another (layoffs, retirement, termination, quitting, etc.), appear to be flattening as a result of nearly equivalent but opposing movements in quitting and layoff activity.

It’s important to understand that job “quits” are included as a component of the “separations” data series as “quitting” is a valid means of workers “separating” from employers but their inclusion tends to create an overall procyclical trend in what would otherwise be logically thought of as a countercyclical process (i.e. downturn leads to increase in separations not decrease).

As the employment situation worsens workers tend to reduce quitting activity presumably for fear that they could risk a long bout of unemployment and this cycles results (click chart for larger version) confirm this with the some of the sharpest year-over-year declines on record.

Layoff activity, now separated into its own series and as you can see from the chart below showed a dramatic surge that is roughly equivalent but opposite to the decline seen in quitting activity.